With battles raging in Congress over the Pentagon’s proposed budget cuts, a new report says the gap in military spending between the U.S. and the rest of the world is narrowing, with Washington’s erstwhile foes — China and Russia — splurging on new weapons systems and several countries from Saudi Arabia to Algeria also spending billions on upgrading their arsenals, according to the yearly rankings of world military spending compiled by the Stockholm International Peace Research Institute, or SIPRI. “There is a shift globally from the West to other countries,” says Elisabeth Skons, SIPRI’s Africa program director. “It is very much related to economic-growth rates rather than security-related factors.”

SIPRI’s report breaks down country by country the $1.75 trillion (yes, trillion) that the world spent in 2012 on military budgets and reveals some startling figures. Russia’s military spending rose 16% last year alone, and China, which is now the world’s second biggest military buyer after the U.S., increased its spending by 7.8%. Among the Middle Eastern countries that disclose their military budgets, several have hugely ramped up their military capabilities, using rocketing oil revenue to buy high-priced fighter jets and missile systems. Saudi Arabia increased its military spending by 12% in 2012, and Oman’s increase was a whopping 51%.

Despite that, military spending globally dropped for the first time in 15 years. Sadly, SIPRI says the drop does not imply a more peaceful time in the world: the decrease is largely due to the U.S. ending its wars in Iraq and Afghanistan and cutting its contingency-operations budgets. U.S. military spending dropped 6% in 2012 to about $682 billion, and there are further cuts of $87 billion planned for 2013. Those cuts have provoked ire in Congress and led Secretary of Defense Chuck Hagel to tell the House Armed Services Committee on Thursday that his mission “was not to cut the heart out of the Pentagon.”

Hagel hardly need worry about that, judging by SIPRI’s report. The cuts make little dent in the Pentagon’s dominance among military powers: in 2012, the U.S. still spent more than the next 10 biggest military spenders combined. And although some countries have nearly tripled their military spending in the past decade — Algeria’s purchases have risen 189%, and Saudi Arabia’s military spending has gone up 110% since 2003 — each of those militaries is still tiny compared with that of the U.S. Nonetheless, the shift away from overwhelming U.S. power is real enough. According to IHS Jane’s, the London-based defense consultancy, the top five Asia-Pacific militaries — Japan, China, India, Australia and South Korea — together spent $285 billion in 2011, about 40% of U.S. spending. Yet by 2020, that gap could narrow to 20%, says Paul Burton, the company’s senior manager for aerospace and defense forecasting.

One of SIPRI’s most notable findings is that in 2012, “the U.S. share of world military spending went below 40% for the first time since the collapse of the Soviet Union” 24 years ago. Yet that still means that the U.S. accounts for four-tenths of all global military spending — and it is 69% higher than it was in 2001. “The U.S. is still a vast, vast military power,” Burton tells TIME. “The others are playing catch-up.”

For Western countries, the recession has made that process of catching up intensely difficult. Several countries have cut plans to acquire the Joint Strike Fighter, a U.S. system designed to replace aging fighter jets, says Siemon Wezeman, senior researcher of SIPRI’s arms-transfers program. But the recession has redrawn a lot of long-term military budgets, and Italy, Canada and the Netherlands are all reconsidering their plans to buy the new jets, produced by Lockheed Martin. “A lot of countries have looked at it and thought they need to rethink it,” Wezeman says. “The money is not unlimited.”